financial results for the three months ended june 30, 2015 · consulting firm specializing in...

Financial Results for the Three Months Ended June 30, 2015

August 5, 2015

Financial Results for the Three Months Ended June 30, 2015 Copyright (c) 2015 Nippon Telegraph and Telephone Corporation

The forward-looking statements and projected figures concerning the future performance of NTT and its subsidiaries and affiliates contained or referred to herein are based on a series of assumptions, projections, estimates, judgments and beliefs of the management of NTT in light of information currently available to it regarding NTT and its subsidiaries and affiliates, the economy and telecommunications industry in Japan and overseas, and other factors. These projections and estimates may be affected by the future business operations of NTT and its subsidiaries and affiliates, the state of the economy in Japan and abroad, possible fluctuations in the securities markets, the pricing of services, the effects of competition, the performance of new products, services and new businesses, changes to laws and regulations affecting the telecommunications industry in Japan and elsewhere, other changes in circumstances that could cause actual results to differ materially from the forecasts contained or referred to herein, as well as other risks included in NTT’s most recent Annual Report on Form 20-F and other filings and submissions with the United States Securities and Exchange Commission.

－1－

* “E” in this material represents that the figure is a plan or projection for operation. ** “FY” in this material indicates the fiscal year ending March 31 of the succeeding year. *** “1Q” in this material represents the 3-month period beginning on April 1 and ending on June 30.

Financial Results for the Three Months Ended June 30, 2015 Copyright (c) 2015 Nippon Telegraph and Telephone Corporation －2－

2,640.2

FY2014/1Q FY2015/1Q

2,706.5

298.0

FY2014/1Q FY2015/1Q

FY2015/1Q Highlights

13.9 16.5

363.3 428.0

Both Operating Revenues and Operating Income increased, with Operating Revenues increasing for the fifth consecutive year and reaching record levels

Enhanced Operating Revenues from network services Expansion of NTT’s user base • 67.53 million mobile phone subscribers (net increase of 0.94 million subscribers) • 18.95 million FTTH subscribers (net increase of 0.24 million subscribers)

• including 1.32 million subscribers to the “Hikari Collaboration Model” (net increase of 0.11 million subscribers; includes 0.94 million subscribers who switched subscriptions from FLET'S Hikari to the Hikari Collaboration Model)

Cost reductions (fixed-line and mobile access): achieved cost reductions of 104 billion yen compared to FY2014/1Q

*Operating Income excludes M&A-related temporary expenses, such as depreciation costs of intangible fixed assets.

Promotion of the B2B2X model

Promoting M&A • NTT DATA acquired Carlisle & Gallagher Consulting Group, a US IT

consulting firm specializing in financial services • Entered into an agreement to acquire Indonesian data center provider

Cyber CSF Overseas Sales: +64.6 billion yen increase year-on-year Overseas Operating Income*: +2.7 billion yen increase year-on-year

Expansion of global cloud services

NTT entered into a business alliance with Panasonic in the areas of visual entertainment and safety & security

Total Sales Overseas Sales (Billions of yen)

Consolidated Operating Revenues

Total Operating Income

Overseas Operating Income

358.8 *

(Billions of yen)

Consolidated Operating Income


FY2015/1Q Highlights Consolidated Results and Forecasts (U.S. GAAP)

Net income represents net income attributable to NTT, excluding noncontrolling interests. *

(Billions of yen)

OperatingRevenues 2,706.5 +66.2 +2.5% 2,640.2 11,350.0 23.8%

OperatingExpenses 2,347.7 +5.5 +0.2% 2,342.2 10,150.0 23.1%

OperatingIncome 358.8 +60.8 +20.4% 298.0 1,200.0 29.9%

Net Income 193.2 +44.2 +29.7% 149.0 630.0 30.7%

[%]

% progresscompared to

FY2015Forecasts

FY2015Forecasts

Changeyear-on-year

FY2015/1QFY2014/1Q

*

Operating Revenues increased for the fifth consecutive year, reaching record levels Operating Income increased due to cost control measures in the Regional communications and Mobile communications segments Net Income increased to record levels due to a reduction in taxes as well as the increase in Operating Income


: While the trend of decreasing Operating Revenues continued, marketing costs decreased in connection with the expansion of the Hikari Collaboration Model, resulting in a decrease in Operating Revenues but an increase in Operating Income.

: Operating Revenues increased while Operating Income decreased due to the growth in overseas businesses and intensifying domestic and overseas competition.

: While Operating Revenues decreased due to the effect of the new billing plans, increased revenues in the Smart Life business and comprehensive cost control measures resulted in increases in both Operating Revenues and Operating Income.

: In addition to an increase in gross margins resulting from increased sales, both Operating Revenues and Operating Income increased as a result of a reduction in unprofitable projects.

358.8

40.7 71.126.4

21.2

208.6234.8

8.2

18.9

9.7

10.3

+30.4

(5.2)

+26.2

+10.7 +0.6

+60.8

298.0

2,706.5

847.5 836.5

464.9 518.1

1,075.3 1,076.9

335.9 360.2285.4 267.2

+53.3

+66.2

(18.2)

+24.4

+1.6

(11.0)

2,640.2

－4－

*

*

FY2014 4-6 FY2015 4-6

* *

FY2015 Contributing Factors by Segment Consolidated Results and Forecasts (U.S. GAAP)

Operating Income Operating Revenues

Regional communications business

Mobile Communications business Long distance and international communications business

Data communications business

Other business

(Billions of yen)

*Includes adjustments such as elimination

FY2014 4-6 FY2015 4-6


Share Buybacks

NTT continues to strive to improve its capital efficiency, and aims to achieve its EPS targets

Planned share buybacks:

• Aggregate buyback amount: up to 100 billion yen

• Maximum number of shares to be bought back: 21 million shares

• Period of share buybacks: August 6, 2015 – October 30, 2015

Progress of Broadband Services


2014.6 2014.9 2014.12 2015.3 2015.6 2016.3E

(Thousands)

4-6 7-9 10-12 1-3 4-6269 136 162 99 235 665 600

Number ofopened

connections879 683 684 720 810 2,966 2,750

(85) (65) (58) (56) (58) (264) (218)

251 199 204 198 135 852 0

FY2015E

FLET’S Hikari

FLET’S ADSL

Hikari Denwa

FY2014 FY2015FY2014

18,319 18,455 18,617 18,716 18,9511,398 1,333 1,275 1,219 1,16219,717 19,788 19,892 19,935 20,113

16,507 16,705 16,910 17,108 17,243

10,000

12,000

14,000

16,000

18,000

20,000

22,000

19,316

1,001

20,317

17,108

Number of subscribers

－6－

Number of Subscribers for Fixed Broadband Services Progress of Broadband Services

FLET’S ADSL

Hikari Denwa

Changes from the preceding quarter

*

*

1

3

* 2 1 *

5 * 4 *

[270] [1,322]

FLET’S Hikari (including Hikari Collaboration Model)

*1 Number of FLET’S Hikari (including Hikari Collaboration Model) subscribers includes B FLET’S, FLET’S Hikari Next, FLET’S Hikari Light and FLET’S Hikari WiFi Access provided by NTT East, B FLET’S, FLET’S Hikari Premium, FLET’S Hikari Mytown, FLET’S Hikari Next, FLET’S Hikari Light and FLET’S Hikari WiFi Access provided by NTT West, and wholesale services (Hikari Collaboration Model) provided by both NTT East and NTT West.

*2 Figures in [ ] represent FTTH access services which NTT East and NTT West provide to service providers. *3 Number of opened connections excludes openings as a result of relocations. *4 Numbers for Hikari Denwa include wholesale services provided to service providers by NTT East and NTT West. *5 Numbers of Hikari Denwa subscribers are presented in thousands of channels.

(Thousands)


2014.6 2014.9 2014.12 2015.3 2015.6 2016.3E

(Thousands)

4-6 7-9 10-12 1-3 4-6

461 729 979 1,322 936 3,490 3,300

FY2014 FY2015FY2014 FY2015E

LTE("Xi")+FOMA

39,523 38,080 36,976 35,851 34,923

24,043 26,215 28,298 30,744 32,609

63,566 64,295 65,274 66,595 67,532

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

37,000

32,900

69,900

－7－

Number of Subscribers for Mobile Broadband Services Progress of Broadband Services

Number of subscribers

Changes from the preceding quarter

* (Thousands)

*

FOMA

LTE(“Xi”)

The number of FOMA subscribers includes communications module service subscribers


2014.6 2014.9 2014.12 2015.3 2015.6 FY2015E

2,877 2,927 2,971 3,014 3,038

1,209 1,256 1,304 1,345 1,378

4,086 4,183 4,275 4,359 4,416

0

1,000

2,000

3,000

4,000

5,000

3,150

1,372

4,522

－8－

(Thousands)

Number of Subscribers for Video Services Progress of Broadband Services

* 1

* 2

FLET'S TV

Hikari TV * 1 * 2

“FLET’S TV” requires a subscription to “FLET’S TV Transmission Services” provided by NTT East and NTT West, and a subscription to SKY Perfect JSAT’s “SKY Perfect JSAT Facility Use Services” broadcast service.

Numbers of subscribers to “FLET’S TV Transmission Services” include wholesale services provided to service providers by NTT East and NTT West.

Financial Information


SI revenues and sales of telecommunications

equipment

－9－

2,342.2 2,347.7

2,640.2 2,706.5 64.3

82.1

Details of Consolidated Statement of Income

FY2014/1Q FY2015/1Q

FY2014/1Q FY2015/1Q

Operating Expenses

Operating Revenues [ year-on-year：+66.2]

[year-on-year：+5.5]

Voice related services revenues

IP/packet communications

services revenues Other revenues

(Billions of yen)

Systems Integration : +85.7 Telecommunications equipment : (3.6)

Fixed voice : (31.1) Mobile voice : (33.1)

Expenses for purchase of goods and services and other expenses

Personnel expenses

Depreciation expenses and loss on

disposal of assets

Other expenses

11.4 37.0

0.3 16.3 25.5 36.0


March 31, 2015 June 30, 2015 (Billions of yen)

20,705.1 20,702.4

Treasury Stock (497.8) [(0.1)]

Liability for Employees’ Retirement Benefits

1,401.7 [+13.7]

Interest-Bearing Debt

4,838.1 [+431.4]

20,705.1 [+2.7]

Assets

Deferred Tax Assets (non-current)

587.9 [(2.1)]

Equity 11,116.2 [+66.4]

9,544.5 [(79.8)]

Liabilities

Depreciable Assets (property, plant and

equipment) 8,024.1 [(73.6)]

Other 44.3[+16.1]

Treasury Stock (497.7)

Liability for Employees’ Retirement Benefits

1,388.0

Interest-Bearing Debt

4,406.7

20,702.4 Assets

Depreciable Assets (property, plant and

equipment)

8,097.7

9,624.3 Liabilities

Deferred Tax Assets

(non-current) 589.9

Equity 11,049.8

Other 28.3

Details of Consolidated Balance Sheet


Details of Consolidated Cash Flows

Cash flows from operating activities

(A)

Cash flows from investing activities

(B)

Cash flows from financing activities

FCF (A) + (B)

（Billions of yen）

Increase/Decrease from the same period of the previous fiscal year

443.8

(526.8)

(83.0)

247.3

500.9

(590.1)

(89.2)

209.2

(1,000)

(500)

0

500

1,000

FY2014

FY2015+57.1

(63.3)

(6.2)(38.1)


361.6 （377.6）

1,795.7（1,892.8） 1,702.9

（1,817.5） 1,660.0（1,760.0）

361.2 （374.8）

276.1 （285.8）

FY2013/1Q FY2013

FY2014/1Q FY2014

FY2015/1Q FY2015E

* Figures in [ ] include investments related to real estate and solar power generation operations.

(Billions of yen)

Capital Investment

145.4 148.593.1

79.2 64.8

46.1

69.268.3

57.9

16.3 23.1

28.0

27.1 26.2

26.8

24.4 30.3

24.2

Other

NTT DATA (Consolidated)

NTT Communications

NTT West

NTT East

NTT DOCOMO (Consolidated)


Shareholder Returns

381.7

150.0

406.5

200.0 338.1

100.0 94.4

70 80 85

55

90 100

60 60

27.5% 32.3% 31.2% 38.2%

37.2% 33.4% 38.0%

33.6% ● ● ●

● ● ●

● ● 45

19.5% ●

Share buybacks (billions of yen)

FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2008 FY2015E FY2007

● Payout ratio (yen) Dividends per Share Note: Dividend amounts have been retroactively adjusted to reflect the two-for-one stock split of NTT’s common stock carried out on July 1, 2015.

FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2008 FY2015E FY2007

financial results for the three months ended june 30, 2015 · consulting firm specializing in...

Documents